JOHANNESBURG, Aug 2 (Reuters) - Platinum producer Impala
Platinum will slash about a third of its workforce over
two years in one of the biggest rounds of job cuts by one
mining company in living memory in South Africa as the platinum
industry faces a day of reckoning.

The number of platinum miners employed in the world's
largest producer of the precious metal has fallen from a peak of
almost 200,000 in 2008 to 175,000 in the face of depressed
prices and soaring costs, fuelling labour and social unrest.

Implats' planned lay-offs announced on Thursday are focused
on its labour-intensive, conventional Rustenburg operations,
where the number of shafts will be reduced to six from 11 with
production cut to 520,000 ounces per annum from 750,000 ounces.

Its shares were around 4 percent higher at midday after
earlier rising 6 percent, reflecting investor support for the
tough moves.

The company clarified that the number of planned job cuts
was 13,400, not the 13,000 specified in its statement earlier,
which it said was a rounded figure.

The number of jobs on the line over two years, out of a
workforce of about 40,000, is even steeper than plans by miner
Sibanye-Stillwater to cut 12,600 at Lonmin over
three years.

Most of South Africa’s conventional platinum shafts are
losing money, according to the Minerals Council South Africa,
while the handful of mechanised ones are profitable. But an
unforgiving geology makes mechanisation challenging in South
Africa and is not an option at Rustenburg.

"The only option for conventional producers today is to
fundamentally restructure loss-making operations to address
cash-burn and create lower-cost, profitable businesses that are
able to sustain operations and employment in a lower metal price
environment," Chief Executive Nico Muller said.

POLITICALLY SENSITIVE

The company narrowed its first-half loss in March by 70
percent to 21 cents per share and warned then that steep cost
cuts were on the horizon as it reviewed Rustenburg, which has
been a flashpoint of labour violence in the past. The company
has not made a profit in six years.

Muller told journalists an alternative would be to sell
shafts it plans to close if buyers could be found, but that
would not be easy.

Sibanye-Stillwater is in the process of acquiring Lonmin's
nearby operations but is unlikely to have the appetite for
further acquisitions as it grapples with the fall-out from a
spate of deaths at its gold mines.

Job cuts are politically sensitive in South Africa, where
data this week showed the unemployment rate rose to 27.2 percent
in the second quarter from 26.7 percent in the first quarter.

And the typical South African mine worker has around eight
dependants, multiplying the social hardships associated with
lay-offs in an economy still defined by glaring racial income
disparities. Black workers will account for the vast majority of
the job cuts.

AMCU, the majority union at Implats, was not immediately
available for comment. The union led a five-month strike in 2014
at the operations of the world's three largest platinum miners,
including Implats.

"We are very concerned about the social implications,"
Muller said.

He said an initial 1,500 jobs will be cut in the first
round, confirming a Reuters report on Wednesday. <
South African platinum miners manage to maintain production
despite job cuts >

(Additional reporting by Zandi Shabalala in London
Editing by Alexander Winning and Emelia Sithole-Matarise)

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